Bank of China raises reserve requirements for banks to 21%

The People's Bank of China from May 18, increases the reserve requirements for banks and deposits in national currency by 0,5 percentage points, according to a statement posted on the site of the Chinese Central Bank. At present, reserve requirements for major Chinese banks constitute 20.5%. This is the fifth increase in reserve requirements for Chinese banks since the beginning of 2011. Last reserve requirements for banks rose in April 2011. This step is taken as part of the Beijing monetary policy to fight inflation. On Wednesday, the government announced that inflation in April was 5.3%. In March consumer price index rose by 5,4% year on year, reaching a record high over the past 32 months mark. During the first four months of this year, the inflation rate amounted to 5,1%. Earlier, Chinese authorities announced their intention to keep inflation in 2011 at around 4%, but according to some economists, to achieve this would be difficult, and price growth for the year will exceed 5%. In 2010, the People's Bank of China to combat inflation, raised the reserve requirement six times. However, inflation in China in 2010 still exceeded the planned figure by the authorities in the 3% to 3.3%. On materials RIA Novosti